Bucharest and the major university centers in Romania, such as Cluj-Napoca, Timişoara, Iaşi, Braşov or Craiova, are well positioned to attract new business in the services sector, despite the Covid-19 pandemic that slowed down the transactional activity and led companies to “work” from home, consider the Cushman & Wakefield Echinox real estate consultants.
The actual context has highlighted even more the Romanian employees’ flexibility and ease of adapting to new situations, as well as the IT infrastructure developed in major cities, elements that have facilitated the transition from the traditional office towards teleworking, thus reducing the impact on operations.
In fact, a study conducted by the Broadband Deals platform in Great Britain places Bucharest on the first position in a ranking of the best 50 cities in the world for remote working, a hierarchy that considered elements such as average internet speed, the amount of remote working jobs available, the living costs and the availability of home delivery platforms. The next three positions are taken by Houston, Las Vegas and Atlanta in the United States, while in the European ranking Bucharest is followed by Budapest, Kiev and Warsaw.
Mădălina Cojocaru, Partner Office Agency, Cushman & Wakefield Echinox: “The continuity of operations is an essential element for companies in all areas. We have noticed this over time through the way companies have secured access to electricity, servers and internet in order to deal with any situation. The Covid-19 pandemic put these companies to a new test, to become operational from home overnight, and the way most of them managed to make this transition is an additional argument that recommends Romania as one of the most attractive IT and related services hubs in Europe and beyond.”
In the short term, a more conservative attitude of some companies is expected, which will have to analyze the impact of this situation on the entire client portfolio, but in the medium and long term the local market will be rewarded for the ability and flexibility to work from home, in case it is required. On the other hand, most companies are currently considering the opportunity to offer employees more flexibility regarding their workplace even after the social distancing measures get more relaxed and as a health safety measure they are working on plans to reduce the density of office spaces.
In Q1 2020, 81,000 square meters of new office spaces were delivered in Bucharest, while Ana Tower and the third building of the Globalworth Campus project in Pipera were the most important deliveries. By the end of the year, new spaces with a total area of around 145,000 square meters are expected to be delivered. Thus, the total volume of new office spaces will reach about 226,000 square meters, approximately 21% down from 2019 deliveries.
Regarding the demand, while the volume transacted in Bucharest decreased in Q1 by 50% compared to the same period of 2019, up to 52,000 square meters, throughout Romania the level remained stable at about 21,000 square meters, the important activity being seen in Timișoara, Cluj and Iași, and also in Craiova, a city that is starting to attract more and more office occupants.
The office stock in Bucharest reaches almost 3.2 million square meters, with a vacancy rate of 9.8%, slightly increasing, while the area of modern offices in major regional cities – Cluj-Napoca, Timişoara, Iaşi and Brașov – approaches the 1 million square meters threshold.